OPEC+ Members to Discuss Raising Oil Production Quotas

Eight member countries of the OPEC+ alliance are set to agree on raising oil production quotas on April 5. While this move will not immediately affect actual supply volumes, it is intended as a signal of readiness to increase output once the Strait of Hormuz reopens.

In practice, this measure will initially have little impact on global supply, as the strategic Strait of Hormuz remains closed due to the ongoing conflict between the United States, Israel, and Iran. "We must respond, at least on paper," one source familiar with the discussions stated.

The war against Iran has caused the largest disruption in oil supplies in history. Major OPEC producers—Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates—have been forced to cut production. The Strait of Hormuz is a critical chokepoint, handling over 20 percent of globally traded oil.

Four other OPEC+ nations—Kazakhstan, Russia, Algeria, and Oman—have not been directly affected by the strait's closure. However, their capacity to ramp up production is limited.

The price of Brent crude oil has surged to a four-year high of nearly $120 per barrel. Russian output faces additional pressure from Ukrainian drone strikes. "The market needs every single barrel that can be produced right now," another source emphasized.

Saudi Arabia and the UAE have already pivoted to export routes bypassing Hormuz. Saudi oil exports via the Red Sea port of Yanbu have increased to nearly 4.6 million barrels per day, approaching its maximum capacity. The UAE continues exporting crude through Fujairah, located outside the strait.

During its last meeting on March 1, OPEC+ approved only a modest production increase for April—a mere 206 thousand barrels per day.

The OPEC+ alliance was formed in 2016 and plays a pivotal role in the global market by coordinating production levels among member states to stabilize prices.